Random Thoughts Ahead of the Federal Reserve Announcement

Is the market confident or complacent?

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The Federal Reserve is on tap and you know what that means; at 2:00 p.m. ET, we'll get the most important stock market catalyst in the world-until the next most important stock market catalyst arrives.

Back in the day-23 years ago when I was a pupon the Morgan Stanley (NYSE:MS) desk-I had an institutional client who sold tens of thousands of puts at "eighths" and "teenies." He had incredible returns for a few years, right up until the time his account was toe-tagged and body-bagged.

Remember how important a role FASB 157 played in the first phase of the financial crisis? I can't help but think that the accounting rules between the US Treasury and the Federal Reserve will play an equally important role in the future.

Barclays (NYSE:BCS) and Deutsche Bank (NYSE:DB) continue to lag the rest of the financials, down 11% and 6% this week, respectively. Yesterday, an analyst at Bernstein offered, "I don't understand what the urgency is for Barclays to do a rights issue, sell CoCo's and deleverage all at the same time. Either the regulator has turned really risk-averse on investment banks or there's something in tomorrow's earnings that no one knows about yet."

I concur, although we're not yet at the nose-scrunch levels of yesteryear. If this one-off dynamic becomes a trend, however, we would be wise to take notice. Once upon a time a sneeze overseas would cause (at the very least) a stateside hiccup, but bulls would argue that this is more of a sniffle, given overseas bourses maintain a green hue.

We had the right thought in buying a little Facebook(NASDAQ:FB) at $19-the 50% retracement of the entire corporate price cycle-but suffered from the dreaded premature evacuation. Looking forward, supply should emerge in and around the IPO price of $38 as longer-term holders have the opportunity to scratch on their long-suffering positions.

Don't get me wrong; I "like" Facebook; it's become the de facto photo album for my family. There is, however, always a difference between a good company or product and a good stock, as we've seen over and over and over again (think Apple (NASDAQ:AAPL)).

If you feel like we've been here before, you would be correct. In particular, the S&P (INDEXSP:.INX) traded at this level on July 15, 16, 17, 24, 25, 26, 29, and 30. There has been a ton of motion (alpha bits) under the top-line movement, or lack thereof, so where you stand is indeed a function of where you sit.

Until S&P 1670 fails, the bulls will continue to lift without a sweat, per the chart below.

I'm trading less but working more, if that makes sense. Many moons ago, back in Y2K when I penned "The Long Hard Road" over at TheStreet.com, we spoke of the financial equation taking three times the effort to make half the coin. I think we're there, which is constructive as we have to go through it to get through it. What remains to be seen is what the "other side" looks like when the dust finally settles.

Today will be a tale of two tapes with 2:00 p.m. ET as a toggle. Remember, the first move after the "rate announcement" is typically the fast move.

To that end, and unlike many other Fed days, I haven't heard the pomp and circumstance surrounding this announcement as we have others. Maybe something, maybe nothing, maybe summer, but it's worth noting as we continue to find our way.